Nikkei 225 Chart Analysis (Mar 5) | Inverted Hammer Reversal +1,032 Yen, Bottom Escape?
The following technical analysis is based on data as of March 5, 2026.
The Nikkei 225 closed at 55,278.06 yen on March 5, rebounding 1,032.52 yen (+1.90%) from the 3/3-3/4 sequential plunge. Open 55,204.16, high 56,619.98, low 54,910.33, close 55,278.06. The candle has a tiny 74-yen body with a 1,342-yen upper shadow and a 294-yen lower shadow—an inverted hammer pattern.
■ Technical Indicators: Current Position
Moving averages: SMA5 56,542.03, SMA25 56,022.90, SMA75 52,665.76. Close 55,278.06 sits below both SMA5 and SMA25, above SMA75. SMA25 deviation -1.33%, SMA75 deviation +4.96% with bullish over-extension intact on the long horizon.
RSI 47.24, up from 41.71, approaching neutral 50. MACD 676.76 / signal 1,102.62 / histogram -425.86—dead cross continues with histogram still deeply negative. Stochastic %K 29.05 / %D 15.27 with %K crossing above %D—a reversal hint. Ichimoku is inside the cloud.
■ Bollinger Bands and Volatility
Upper 59,679.30, middle 56,656.97, lower 53,634.64, bandwidth 10.67%. Close 55,278 sits below middle but rebounded sharply from the lower band of 53,634. Bandwidth narrowed from 11.99% to 10.67%—volatility settling in early phase.
■ Chart Pattern Analysis: Inverted Hammer
Today's candle is a textbook inverted hammer. Conditions: (1) appearance at bottom region after a downtrend, (2) small body, (3) upper shadow at least 2x the body, (4) negligible lower shadow. Here: (1) bottom region after the -3,811 yen sharp decline (✓), (2) body 73.90 yen (✓), (3) upper shadow 1,342 = 18x body (✓), (4) lower shadow 294 = 4x body, longer than textbook but acceptable. Bulkowski's bottom reversal continuation rate around 65%; confirmation candle (a bullish one) needed. Chart Master's pattern detail page covers inverted hammer confirmation.
■ Support and Resistance Levels
60-day range: 48,643.78 to 59,332.43. Today's close at 62.07%. Resistance: 56,619 (today's high), SMA25 56,022, SMA5 56,542, psychological 57,000. Support: 54,910 (today's low), Bollinger lower 53,634, psychological 55,000. Fibonacci 50% level is also nearby.
■ Volume and Market Sentiment
Volume of 184.9 million versus 20-day average yields 1.06x—slight increase (normal). For bottom reversal signal, volume expansion is preferred; current volume is modest. Multi-timeframe: daily uptrend / weekly strong uptrend / monthly strong uptrend—misalignment.
■ Market Catalysts and Environment
Following the 3/4 plunge, overseas-market autonomous rebound and FX direction supported the domestic market. Limited individual catalysts post-earnings season; technical-driven rebound dominates.
■ Outlook and Scenarios
Bullish: Reclaim of SMA25 56,022 brings full rebound, with 56,619 (today's high) / SMA5 56,542 / 57,000 in scope. The 56,619 inverted-hammer upper-wick tip is the short-term resistance benchmark. Bearish: Break below 54,910 invalidates the inverted hammer; pressure to Bollinger lower 53,634 / SMA75 52,665. Neutral: 54,910-56,619 range while a base forms.
■ Summary
March 5 inverted hammer signals bottom reversal at the lows. Key levels: upside 56,619 / SMA25 56,022, downside 54,910 / 53,634. Tomorrow's confirmation candle determines reliability.
The inverted hammer alone has limited reliability; subsequent confirmation candles (bullish ones) are essential. Today's extreme upper shadow of 1,342 yen symbolizes "buyer challenge and pause"—an attempt at large rebound during the day, met with selling near the highs that resulted in a small intraday gain. From tomorrow, breaking above the inverted hammer's upper-wick tip 56,619 strengthens the bottom-reversal signal, while a break below today's low 54,910 invalidates the inverted hammer and reopens downward pressure.
* This article provides information based on technical analysis and does not constitute a recommendation to buy or sell any specific security. Investment decisions are your own responsibility.